Minister of Finance and Economic Planning, Joseph Mwanamvekha, has said there are several risks facing the 2020/21 National Budget and that it would take concerted effort to contain possible pressure points when implementing it.
Mwanamvekha said in an interview that implementation of the next budget could be marred by possible spillover effects of the Covid-19 pandemic, among other factors.
Traditionally, in the recent past, budget implementation has been clouded with numerous challenges including fiscal pressure, unpredictability of budget support, procurement hurdles and poor public finance management.
Consequentially, there has been a mismatch between revenue lines and expenditure, and in most cases, the treasury has been resorting to borrow domestically to fund the deficit.
Mwanamvekha said in the past months, revenue streams have been greatly affected due to a slowdown in economic activities.
“We have a challenge as the pandemic has affected the economy as well the budget because our borders are closed.
“We also have a challenge on domestic revenue collection because business in most companies have slowed or even closed. So we are also failing to collect tax there,” he explained.
However, Mwanamvekha said the government is in talks with potential development partners for a possible budget support to help cushion the resource envelop.
Speaking in an interview Monday, taxation expert, Emmanuel Kaluluma, said the Treasury should tame its appetite for expenditure and operate within budget ceilings.
Key contributors into the 2020/21 National Budget are suggesting that the next financial plan should focus on recovery from possible effects of Covid-19 pandemic.
The stakeholders feel that the pandemic will have grave effects to the economy.
Institute of Chartered Accountants in Malawi for instance suggests that the next budget would have to outline a possible recovery plan from exogenous shocks including Covid-19 pandemic.
In a recent interview, Employers Consultative Association of Malawi president George Khaki also said the employers in the country expect the government to channel more resources towards the recovery of the economy.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.